Mobile operators warned on 'unlimited' data gouging

A UK watchdog has urged mobile operators to obey the spirit of rules on data billing, not the letter, if they don't want greater restrictions imposed.

Calling for more useful information for customers, the UK's Communications Ombudsman reckons it might be necessary for telcos to send out warnings when punters approach their data caps, and firms should be prevented from using the word "unlimited" unless the provision really comes without any limit.

Most network operators offer some sort of "unlimited" tariff, but all come with some sort of "fair use" cap and tariffs differ on how customers who exceed that cap are dealt with. The ombudsman's attention is on tariffs that charge a high rate for data outside the cap, often punitively high, and speaking to BBC Radio 5 (fast forward 7mins) he's made it clear that the status quo is not acceptable:

Most mobile operators are playing by the rules, so that then begs the question: are the rules what they ought to be?

The use of "unlimited" has been challenged before, but is allowed by the Advertising Standards Authority as long as the cap is placed high enough to go unnoticed by a "typical user". However, your typical user is consuming more and more data, and the caps need to reflect that, but as long as they do the advertising (self) regulator reckons it's OK.

Some tariffs do issue warnings, but given the latency of text messaging (which can see individual messages delayed by hours) the operators risk alerting customers too late. App stores are awash with smartphone applications for counting data consumed, but users are still getting caught out, including a fair proportion of those listen to Radio 5 Live.

Unlimited tariffs are a real problem for network operators, just as they are for fixed operators - one ends up with a fraction of the customer base consuming most of the resources. Internet access does not come at a fixed cost to the provider, who has to pay for peering arrangements with the rest of the world, but customers want a fixed price so the provider has to juggle priorities.

Three is crowing that its "unlimited" offering really is unlimited - no fair use or excess fees - but if you're not in the minority that consumes huge quantities of data then you have to ask yourself if you want to subsidise those who do.

The punitive rates charged by network operators are often unfair, and there's certainly a case for near-cap warnings as long as operators won't be held liable if they're delayed. Fixed ISPs have been providing just that for years: a friendly e-mail when one approaches the limit, a suggested upgrade if one exceeds it slightly, and that's surely a sensible model for the mobile world to adopt. ®